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Saving behaviors of private households under varying tariff structures, price levels and incentives - Experimental evidence

Author

Listed:
  • Harpenau, Franziska
  • Magalhaes, Katrin Marques
  • Steffen, Nico
  • Wiewiorra, Lukas
Abstract
More efficient and sustainable energy consumption behaviors are crucial to mitigate the adverse effects of climate change. This paper examines how dynamic personal pricing and externality cost incentives interact and affect energy conservation behaviors. We conduct an online lab experiment in which participants complete real-effort tasks under different cost schemes. Increasing personal costs that reduce individual bonuses, significantly decreases participants' energy usage, although it requires more effort in the form of additional time. However, emphasizing increases in externality costs, representing environmental damage through reduced donations, does not impact performance. This suggests that the introduction of such prosocial incentives matters more than their magnitude. While environmental attitudes predict baseline usage, they do not change marginal responses to cost changes. Our results provide novel evidence on the motivational nuances underlying energy conservation and have key implications for policies considering a combination of incentives.

Suggested Citation

  • Harpenau, Franziska & Magalhaes, Katrin Marques & Steffen, Nico & Wiewiorra, Lukas, 2023. "Saving behaviors of private households under varying tariff structures, price levels and incentives - Experimental evidence," WIK Working Papers 7, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH, Bad Honnef.
    • Handle: RePEc:zbw:wikwps:280956
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    File URL: https://www.econstor.eu/bitstream/10419/280956/1/1877048208.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Energy consumption; Energy conservation; Behavioral; Environment;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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